The ‘Trump Trade’ is turning into a loser in the stock market - Fortune

What the report says

Fortune, citing Bloomberg and Ned Davis Research, reported that a basket of stocks and exchange-traded funds associated with expectations for President Donald Trump’s second-term economic agenda has reversed sharply after early gains. The Ned Davis Research Trump Trade Index, made up of 12 ETFs tied to themes such as homebuilding, defense spending and reshoring manufacturing, has fallen about 16% since May, after outperforming the S&P 500 at the start of the year.

The report said Ned Davis Research linked much of the reversal to the U.S. conflict with Iran, which it said has contributed to higher energy prices, inflation expectations, interest rates and a stronger dollar. Pat Tschosik, the firm’s chief thematic strategist, described the pressure as part of a series of inflation and supply shocks. Several ETFs that had risen at least 20% earlier in the year, including funds focused on rare earths, uranium and defense technology, later turned negative for the year, according to the article.

Fortune also reported that investors have faced difficulty interpreting policy shifts, including tariffs and executive actions. The article cited outflows from the Truth Social God Bless America ETF, ticker YALL, which has exposure to energy, industrials and financials and was down more than 4% for the year, while the S&P 500 was up about 8%. Trump Media & Technology Group, not held by that ETF, was reported down 35% year to date despite a July rebound.

The broader significance is that trades built around political expectations can be vulnerable to geopolitical shocks, inflation concerns and changing policy signals. Some backers remain optimistic, including Point Bridge Capital’s Hal Lambert, who argued that manufacturing-related policy benefits would take time to materialize.